How are the elderly affected by predatory lending practices?

Answer:

The elderly
are often cash poor but equity rich and are an easy target for predatory
lenders. The elderly do have low fixed income in most of the cases and need
access to home equity to pay for medical care and home maintenance. Minority elderly
homeowners have limited access to traditional approved lenders and have to rely
on less legitimate sources, which leaves them really vulnerable to predatory
lending practices.

Examples of Predatory Lending Targeting the Elderly

Accepting a
double digit interest rate means you may end up with a balloon payment nearly
as big as the starting loan balance.

Refinancing
multiple consecutive times with no purpose in sight and paying expensive
insurance premiums can triple your loan instead of reduce it.

Excessive fees, harmful provisions, prepayment
penalties, equity stripping are among the most common predatory lending
techniques targeting the elderly.

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